Tungsten Insights: E-Invoicing Lessons From a Panel of Suppliers

Earlier today, I facilitated a panel of 4 suppliers at Tungsten’s customer conference. I’ll spare all the details to protect the names (and companies) of the innocent, but a few key lessons surfaced today and in other recent conversations with suppliers:

Larger suppliers are clearly learning to play the e-invoicing game with vendors and network providers. They are negotiating global deals just as they would negotiate when buying CRM, procurement or other technology. If you have material volume with a network and you have not negotiated, you should. This goes for everyone with a fee structure spread between buyers and suppliers (or entirely with one party) including Ariba, Tungsten, Basware, etc.

There seems to be a material difference between suppliers willingness (within this small sample) to take real-time discounts offered via a network or e-invoicing provider compared with smaller suppliers, given that discounts (in the case of some of the participants I questioned) were previously negotiated into contracts. Note, a broader sample of research we have looked at suggests conflicting data to this.

Best practice (from a supplier perspective) is clearly investing the time to create a single “map” to a network provider’s infrastructure versus either portal connectivity or customer-by-customer connectivity. However, the map must be dynamic and adjust to changing requirements (think of it as a supplier-driven SaaS deployment spread to many customers – via the network) to accommodate specialized requirements and needs. It’s not simple, and suppliers should put a sharp technical resource with EDI experience in charge.

Suppliers are often the best advocates of e-invoicing and how to position it to other suppliers. From a supplier angle, the advantages to avoiding paper are numerous, and the vendors sited numerous benefits including improving A/R efficiency and reducing A/R costs, straight through processing, faster exception management, being able to improve KPIs around first pass approval, faster invoice approval (reduced cycle time) and, of course, not funding the antiquated post office.

Suppliers generally are in the early stages of defining their own set of KPIs to quantify the benefits of e-invoicing. While the benefits are clear, the overall TCO and metrics are not. This is a big opportunity for network providers to help showcase the value of networks overall by defining the right set of benchmarks to suppliers to feed internal KPIs and TCO calculations – as part of broader supplier-centric offerings in the future.

Of course, this is by no means a scientific list of findings. It’s merely a few lessons learned from a panel of 4 generally larger and experienced suppliers. Stay tuned for further observations from Tungsten Insights in the coming days – including other supplier lessons and how best to market e-invoicing to suppliers.